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Lawsuit pegs retailers as Y2K scapegoats

Lawsuit pegs retailers as Y2K scapegoats

Are computer retailers like Circuit City Stores responsible for informing consumers whether the PCs and shrink-wrapped software they sell are year 2000-ready?

Lawyers for Tom Johnson, a Californian resident, said yes. Johnson is suing nine retailers, including Virginia-based Circuit City, Delray Beach, Florida-based Office Depot and CompUSA in Dallas. He accuses the retailers of misleading him by failing to inform him about the year 2000-readiness of the computer products they sold.

Although the case is consumer-focused, it does have bearing for many Fortune 1000 companies that buy shrink-wrapped software and other products from retailers.

Currently, 81 per cent of all commercially sold packaged software isn't yet year 2000-ready, said Lou Marcoccio, an analyst at Gartner Group in Massachusetts.

Rich Ergo, a partner at Bowles & Verna, a Californian law firm representing Johnson, charged that the retailers have violated California's Unfair Business Practices Act by failing to notify consumers that computer products they are purchasing may not work next year.

Ergo's firm is seeking to force the retailers to inform past and present customers whether products they bought are year 2000-ready, plus to return a portion of the profits retailers made from selling non-compliant products.

Said Johnson: "When I buy something from Circuit City, I expect that the sales staff will tell me if what I'm buying is going to work beyond this year."

"There is a possible liability theory here that could work," said Dean Morehous, chairman of the technology practice at Thelen Reid & Priest LLP, a San Francisco-based law firm.

Peter E. Glick, a lawyer representing Circuit City, sent a letter to Johnson's lawyers saying the charge "fails to state a claim because . . . the products at issue are not in fact 'materially defective'."

A hearing is scheduled for April 1, when the retailers are expected to ask that the suit be dismissed.


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